Halfway to recession. Nasdaq has already lost -20% from the top

Russia's military attack on Ukraine shows no signs of de-escalation and continues to leave its mark on world markets. This led to soaring commodity priceswhich increased concerns about inflation and economic growth, posing new challenges for central banks.

IN USA Federal Reserve he may raise interest rates by 25 basis points at the March meeting, but the chairman Jerome Powell it also paved the way for more aggressive measures should inflation persist. Investors are now awaiting Thursday's US inflation report. According to expectations, the price dynamics is to reach the level of 7,9% in February.

Will the stock exchange experience a repeat of the 70-80s?

Concerns about stagflation or even recession may have a negative impact on the stock indices. During Monday's trading, the Dow Jones and S&P 500 fell by 2,37 percent, respectively. and 2,95 percent The Nasdaq lost 3,62% to enter bear market territory as its value fell by 20%. from the record level in November. Cyclicals lost most consumer, technology and communication services sectorswhile energy stocks seemed to perform better.

The US stock market may now begin to price in a repeat of the 70s-80s, when the US economy fell into stagflation and recession during the oil crisis. It was then a very difficult time that people had been recovering from for over a decade. The indices, excluding inflation, fell by more than 40 percent. from its peaks. Currently, the Nasdaq index may have already made half of this move.

Crude oil has receded from the peak, but raw materials are still in the price

The rapidly increasing prices of raw materials may be responsible for stagflation and recession. energetic. WTI Crude Oil seem to stay at around USD 121 per barrel on Tuesday. In the previous session, they reached a 14-year high of $ 130,5. The US is getting closer to banning Russian oil, which may still have an impact on the price. Sanctions from Russia are still pending.

The dollar attracts capital and distances the euro

The dollar index is now trying to stabilize above 99 points, remaining at the level last seen in May 2020 and taking advantage of likely capital flows under the so-called safe harbor.

The main currency pair EUR / USD has dropped to levels seen at the time of the pandemic hit the financial markets in early 2020 and appears to remain below 1,0900.